Income Tax - Think About Charitable Gifts Before End of Year
The end of the year is a good time to think about donating to charity. Not only is it a time of need, but it also can provide a nice income tax deduction. Depending on the type of gift and who is goes to, individuals can receive an income tax deduction for up to 50% of their adjusted gross income for charitable gifts. Here are some tips to consider when making your end-of-year gifts:
- Make sure the organization is a recognized charity by the IRS. IRS.gov has a searchable database that you can use to verify the organization's tax status.
- You must itemize your deductions in order to take the charitable deductions. The deduction is not available to taxpayers that just take the standard deduction.
- Try to get a receipt for all charitable gifts, including the value and short description of the contribution, date of the gift, and name and address of the organization. You must have a written acknowledgment of the gift from the charitable organization for gifts of $250 and greater.
- Contributions are deductible in the year made. To be counted this year, check must be mailed and credit cards must be charged by 12/31. Note that your credit card bill does not have to be paid by 12/31.
The above tips should apply in most cases. However, there are always exceptions to the general rules. Please contact us if you have any specific questions about the impacts of making a gift, if you are making a sizable or unusual gift, or if you want to integrate your gift into a comprehensive giving / estate plan.